Ahead of Wednesday’s meeting of G7 Finance Ministers in Dresden, Germany, 120 investor CEOs from around the world managing funds worth more than $12 trillion have written an open letter to finance ministers urging them to support the inclusion of a long-term emissions reduction goal in the international climate agreement due to be sealed in Paris in December.

This is the first time a global coalition of investors has called for a long-term emissions reduction goal to be included in the Paris agreement. In the letter the 120 CEOs also call on finance ministers to support the submission of short to medium-term national emissions pledges and country level action plans.

The letter says that “climate change is one of the biggest systemic risks” faced by investors and that with the “right market signals from policy makers, investment in low-carbon and climate resilient opportunities can flow.” The letter calls an ambitious agreement in Paris a “critical first step” to limiting the average global temperature increase to 2°C.

“An agreement in Paris, including a long-term emissions reduction goal and strong national plans will set a clear pathway in favour of a low carbon future and give investors clarity,” say the investors, who also urge policy makers not to delay action on climate change as this will “require more stringent policies later…exacerbate risks associated with energy investments and potentially strand assets.”

German Chancellor Angela Merkel has made climate change a priority for Germany during its Presidency of the G7, with the issue due to be discussed at the heads of state meeting in Elmau on June 7-8th.

The letter from investors follows the Global Investor Statement on Climate Change released in advance of the U.N. Climate Summit in September, in which more than 360 investors managing $24 trillion in assets called for an ambitious global deal, carbon pricing and the phasing out of fossil fuel subsidies.

“Along with 119 other investors with assets over $12 trillion, CalPERS calls on finance ministers worldwide to support a meaningful agreement at the upcoming Paris meeting. We believe that a long-term emissions reduction goal, carbon pricing, and strong national-level plans are critical to send clear market signals. A global agreement in Paris will provide clarity for investors and advance the shift to a low carbon economy.”

Philippe Desfossés, CEO of ERAFP, the pension fund for French civil servants, added:

“The world needs $53trn of energy investment by 2035 to avoid dangerous climate change and investors need policy certainty to help deliver this. Knowing international policy is united on a clear path towards ever-lower emissions generates confidence that our low carbon investments will be supported, not harmed, by future policies. Finance ministers have a critical role to play and should support ambitious national climate plans and a long-term emissions reduction goal. A low carbon future is an imperative. Delaying strong policy on climate change would be a false economy.”